Wie man Nein sagt zu den falschen Gelegenheiten

0:00I run a dietitian consulting and wellness services company mostly regionally located in Pennsylvania. We did 3.5 million in >> How many locations? >> Uh 10. >> Okay. >> Awesome. >> And we have 30 dieticians across those and we'll be adding more. >> Super cool. [snorts] >> We did 3.5 million in revenue in 2025. We've had consistent 35 to 50% year-over-year growth for the last 3 years. >> Word of mouth or ads or what?

0:25>> Um dominantly provider network. Yes. >> Okay, got it. >> we get about 400 referrals a month from just the 18 ancillary practitioners we work alongside. >> Amazing. >> We have strong SEO locally and then we have built a local brand presence, podcast, content. We give a lot of free [ __ ] away in the local region. So >> Great. >> I'd like to be a 10 million in revenue. I definitely have those visions of 100 million dollar models and I think the thing that I struggle with is I get so excited about the different models that I struggle to say no to the right things and say yes to the right things.

0:58>> Uh-huh. [snorts] >> And so you know, franchising models, licensing models. >> Yeah. >> And I feel like a way to the way I like to think about it is we spent about 2 years ago when I really started digging into your content. You guys asked a really good question which is if you doubled your referrals tomorrow, what would break? And the answer was [ __ ] everything across front, middle, back. We went to work operationally. I spent the last 2 years in the trenches and we've now fixed that problem. So now we get to go out and say, "Hey, let's go double our referrals." which is great.

1:23>> Um but I definitely have had a tendency to dabble and say yes to all the adjacent things. Like, "Oh, it makes sense to have a gym alongside it because they can work with the trainers next door." And "Oh, if I want to do more outside of regions, should I license to other dieticians that are passionate or franchise?" >> And so I start to see all of these models and then I spread myself thin, my team thin. And so I my ultimate question for you is is there a framework you utilize to be more decisive in your yeses and no's?

1:51>> Yeah, what do you think outside of the framework? What do you think I'm going to tell you to do? >> [snorts] >> Slow down and do what I'm doing well even better? >> Yeah, yeah, sounds [laughter] good. >> Great plan. >> [snorts] >> Yeah, that's I think one of the things I'll notice that in my industry it's being heavily funded right now for the first time. So I've run this practice for 12 years and dietitians in private practice was not a thing a decade ago. So I had kind of this early thing, built something cool and in our current setup if you look across the nation there's a bunch of small 100k to million dollar private practices, then there's our group and then there's a bunch of 100 million dollar venture capital funded groups that are doing virtual crazy scale. And so I start looking at how can we scale faster and I gave an analogy Ed really helped with this too is I feel like I just spent a bunch of time making our escalator like really really awesome and there's a bunch of elevators.

2:42>> Sure. >> And so I'm trying to decide do I just need to keep being a better escalator or should I pivot hard and be an elevator? >> Yeah. Um So a couple things. So as much as I would just be like just do more which you know, not a bad play. Um This is a grass is greener so you can use yours but it also works the same way. Um It actually so to me this is this by the way. >> Yes. >> Um What What do you want to have happen?

3:10>> I want to so big vision human flourishing. I want yeah, I was going to say zoom in money. Money, yeah, 100 million would be the the ultimate >> Exit or revenue? >> Um revenue. >> Okay. Um >> 10 million in 3 years but long term like when I think 7 to 10 year plan, yeah. >> Well, 10 is the one that you can see so we can think about that. >> kind of feel like I'm getting clearer on how to get there, yeah. >> Yeah. >> [sighs and gasps]

3:38>> So uh Keith Cunningham has a really good thought process for this which is what's the upside number one, what's the downside and can I live with the downside? >> Ooh. >> And if the downside is not livable then you just don't do it. Okay. And so, if the downside is I mean, you could ask a fourth question, which is how likely is it, and then can I live with the downside? But, um I think that that that kind of gets to the heart of the issue.

4:04>> I would agree. >> Um which is like, have you done anything virtual before? Not that you can't figure it out, but do you? >> 60% of our clients are virtual. >> Okay. Then let's just say hypothetically, what stops you from doing lots of virtual right now? >> So, we've scaled that. There's massive licensure variants where an insurance reimbursed product >> Yeah. >> 700 insurance companies, they're all different being licensed in certain states. So, there's the difficulty of that patchwork quilt, we'll call it. But, to be fair, we've worked really hard to get to a place where we can definitely do more virtual in more states and scale that. The only other component, that's what a lot of those VC-backed groups are is they're virtual only.

4:39>> Mhm. >> Their quality sucks, client engagement, client retention, um that you know, what we'll call like in the community part, that's where none of them have doctors and therapists and physical therapists >> How do you know that their metrics suck? >> Um I've been offered acquisition offers by two of them because they want our quality and can't figure out how to do it at scale. >> Mhm. >> So, I've been kind of that like one little shiny version of quality in a industry that's going quantity.

5:05>> are there ones that are doing it with the good metrics? >> Not yet. This is all It's all of these groups are within 2 years. It's super new in my industry, which is pretty wild. And dietetics is a fairly low, you know, insurance rates are $150 an hour, whatever you want to call it, and they're pretty set, and they're pretty straightforward. So, by the time you pay the dietitian, the admin team, the marketing team, the VC group's not not getting a huge hunk, you know? >> Mhm. >> [sighs]

5:36>> I mean, it's a hard decision to make because it really I mean, this is a risk tolerance thing. So, said differently, can your existing vehicle get you 100 million? Yes. Will it probably take 15 years? 10 to 15. >> Yeah. >> Yes. Are you okay with that? >> That's the more important question. >> Are you okay with that?

6:02>> Mhm. That feels long. I think my my in my brain, I'm doing other things in 10 years. >> Okay. Play the other side out. If you hard pivot and then this business goes to not profitable >> Mhm. >> and the virtual thing doesn't work as easy as it was because all of these smart people with lots of money haven't figured it out. And so I like to assume that my competitors are not morons. >> Yeah.

6:29>> And especially if they're well funded with smart teams. >> Yeah. >> This might also be one of those maybe your competitors actually have a shitty business. >> Yeah. It's felt like it's flashy funding that's going to bust in the next year or two. And that's within my team I've had a mantra which is when they go quantity, we go quality. So we double down on community endeavor and you know, quality of service, labs, all that good stuff. But again, it's it does it just it there's that pull to you're not helping enough people, you're not doing enough, do more, go bigger.

6:57>> Mhm. >> Are you are you swinging hard enough? And then that's where I start to go, well, maybe I'll launch case specific university to help train dieticians nationally and then you know, like my brain just starts to come up with these like extra projects and then I find myself splitting my time across things that I shouldn't be splitting my my time across. >> Yeah. So, you think 10 years is too long? Right? So then I guess the next question is is there a way that we can make this existing vehicle faster? So how can we do more?

7:28And so there are ways that you can do more with it within this existing vehicle, which is probably more of an M&A route. >> Mhm. Yeah. >> Realistically. >> [snorts] >> And so, the question is if you were able to go into an existing practice, how quickly would it how long would it take you to turn the practice into your metrics? >> It would take somewhere in the around a year based on what we've done. I do some mentoring. We've done some sampling of that. >> team can't do that. It's still you.

7:53>> Uh my team No, my sorry, it's myself and my team. We We kind of have all integrated within. Yeah. >> So, there's no way for you to buy like five of these or anything like that. >> Oh, we haven't thought about actually, like you said, actually acquiring smaller practices. >> Well, that's yeah. >> That's I I thought I thought you were going to >> one that's everything stood up. >> Yeah. >> They already have a team. They have some clientele. How long does it take you to just make it do it make them do it your way? >> Oh, that would be within 6 months. >> Okay, that's a little faster. >> yeah. >> And so

8:20>> That's kind of the vision of the licensing. So, just as a reference is I built this internal portal case specific RPN and now it's a CRM >> on this with him real quick cuz I think it'll apply to like literally half of you. So, let me let me walk you through why the franchise isn't a good idea. All right? So, number one, this is not a capital intensive business. Right? And so, typically if you don't have the point of franchising is the capital component. That's It's the most expensive form of capital that you can get. You're giving literally almost all the business away and you're getting a royalty. So, what's each location doing revenue?

8:53>> About 500k. 350 to 500 depending on where the office >> just use five Let's use both cases. All right? >> So, 500k is what each location does. And you guys can >> [laughter] >> You guys can follow along with your own metrics. So, 500k, right? Top line. What's What's bottom line? >> Like 350. Oh, you mean sorry, like what's the >> like, [ __ ] it. What are we talking about? >> [laughter]

9:18>> Do that, man. Shut up. >> Sorry. No, we've got about a 15% margin, so it's going to be like 425. >> Profit. >> Oh, so profit on 500 would be like 75k. >> Okay, got it. Okay, thank you. All right. Now I can see why you why you have a little bit of frustration. You're good. Okay, so we're making $75,000 per if you were to do the licensing model, what percentage top line would you be taking? >> Somewhere between 6 and 8% probably.

9:44>> Okay. Um You know that as it I mean this Okay, so when I look at that it's cuz your margins are dog [ __ ] Um If you could take half the margin in a licensing fee they're not going to do as well as you, but you're going to take it off top line. >> Yeah. >> It's not terrible. >> It would have and it would allow me to cross state lines, which is say meet that other passionate person that's in their community.

10:14>> I like this. So I like this. So I would probably look at Now mind you, this is the This is under this premise. >> Yeah. >> I am not willing to wait as long as it is for me to privately own all of these. My neighbor >> [snorts] >> Mr. Panda 3.7 billion top line 27% net margin selling chicken, Kung Pao, General Tsao's, the whole thing.

10:40Sweet and sour pineapple for those of you know what I'm talking about. Uh And he's been he's been selling chicken for 45 years. >> Yeah. >> And he did it one location at a time. And so you might not see yourself in 10 years doing it because you think about this times 10. But if in 10 years you were doing 40 million a year your life's different, dude. >> That's what I'm saying.

11:06>> Because here's Here's the reality as business scales. Your life at the most at the pinnacle of success in every business is the same. You'll have a head of sales, you'll have a head of marketing, you'll have a head of product and you know CS, you'll have a head of IT, you'll have a head of legal. Um you'll have some sort of AR AP cuz you're in the insurance world, right? Some finance. Whether you sell widgets, back massages, or motorcycles. >> Yeah.

11:31>> It's going to be the same thing. And so, everyone feels like their business is really unique, but the higher up you go, it's the same [ __ ] And you're going to be dealing with seven to 10 personalities every day that you got to manage. So, really changing your life is managing those seven to 10 people and making sure that they're ones that you like. >> Yeah. >> And so, like the key to longevity is fixing those, and then making sure that the business model sustains and that you feel good about it in terms of helping people, which I think you do have that part. >> Yeah.

11:56>> And so, maybe the biggest gift that I can give you is that there is nothing on the other side of this this rainbow. It's Suzanne Schiflett, who was my CFO back in the day, said um the grass is always green on the other side because it's fertilized with [ __ ] And so, there's just there's bodies there that are buried that you don't know about. Like the fact that none of these other guys who have unlimited money and probably a lot of talented people haven't made it profitable, not to say that you can't, but I'm like, is that the bet I want to make when I already have something that's that's good and decent right now?

12:26If I were you, I'd be looking at these core economics and see what I could take off from the bottom line in terms of COGS. Like what things can I can I build so I can drive efficiency in this business because in the insurance business, you can't control price. And so, you have to control efficiency. That's how you win from the bottom up rather than top-down. >> Yep. >> And so, that's where I would look at this cuz even if we can take this from like 75, if we can improve the margin by like 10%, it's a whatever the math is there.

12:51It's 67% improvement in bottom line. That's like you opening six more locations. And you could probably do that in six months. >> And that's actually what we've been building out internally. It's exactly >> So, it's like we do that, and then then there's the decision of like, okay, what few things do I hate that I can get some more people in that I just made the cash flow to cover, and then all of a sudden I have an asset that then continues to grow. And at that point, you might have some bandwidth to start, if it continues to grow without you, then you can start a licensing thing that you can get your entrepreneurial chops on, but that's once this thing continues to grow and open locations with an opening team that continues to grow. So, that is my litmus test for you. I will give you my absolute stamp of approval to go to the licensing model and take, you know, 6 to 8% of top line once new locations, so like let's you can open up a location per quarter with a team that's not you, that you're not involved in at all.

13:39>> Beautiful. >> But what will happen is that when that happens you won't give a [ __ ] anymore. >> That order of operations is perfect. Thank you. >> If you are a business owner and you are not growing as fast as you like, I'd like to give you a free gift. So my team and I put together the $100 scaling road map, which is basically 200 hours of us looking over all the portfolio companies we've had and what stages of growth they went through and more importantly where they got stuck and how they got past it. And so we broke it in these 10 stages and we made this little kind of quiz thing where if you put in your business information it'll tell you where you're at and the most important part for you, what to do for each of functions of the business across product, marketing, sales, customer success, recruiting, IT, human resources, and finance. And so no matter what you're struggling with, someone else has already struggled with it and solved it. And so I'd like to give you this thing absolutely free. You can go to acquisition.com/roadmap, plug in your business information, and if you want us to actually help you deconstruct the business and you're trying to scale, we'd love to help you out. On the thank you page you can just book a call with my team and we will look at the business, see if we can help, and if we can we'll invite you out to Vegas and we'll do this in person live.